Tesla CEO Elon Musk has reached a settlement with America’s powerful Securities and Exchange Commission, in which he has agreed to stand down as chairman of the company he founded, following allegations of securities fraud.
Musk, who gets to continue as CEO, also agreed to cede sovereignty over his Twitter activities – which got him in trouble in the first place – and to pay $US20 million fines; one each for him and his company.The news saw Tesla shares rebound 17 per cent on Monday in the US to around $US310 a share, returning the company to a $US53 billion plus ($A73 billion) valuation, and no doubt upset critics and short sellers.
But the outcome is a good one for Tesla and its shareholders. The corporate governance changes imposed – a new chairman, for instance – will help the company re-position and should facilitate any further capital raisings if needed.The Tesla board says it still has full faith in Musk: “Tesla and the board of directors are fully confident in Elon, his integrity, and his leadership of the company, which has resulted in the most successful US auto company in over a century,” it said in a statement before the settlement with the SEC was reached.
“Our focus remains on the continued ramp of Model 3 production and delivering for our customers, shareholders and employees.”